Monday, June 13, 2011

Medical Manufacturing in the U.S. is Alive and Well

"Made in the USA": The Continuous Flow Heart Pump

NPR featured a story this morning titled "Heart With No Beat Offers Hope Of New Lease On Life" about new technological advances in the U.S. for making artificial hearts. Several specialists at the Texas Heart Institute have developed a "no beat" continuous-flow heart pump that should last longer than other artificial hearts and cause fewer problems (see photo above). This development represents a departure from the traditional research in pulsating heart pumps and would result in a patient having "no pulse" because of the continuous flow feature of the new pump.

The medical breakthrough is interesting by itself, but the story is important for another reason: It's a great example of "U.S. manufacturing in the 21th century." You probably won't see or notice a "Made in the USA" label on a heart pump or a lot of other high-tech medical equipment manufactured in America like MRI machines, CT Scans or X-ray equipment, but they are all part of America's thriving and growing high-tech manufacturing sector.

The chart above displays the Federal Reserve's monthly inflation-adjusted measure of "Medical Equipment and Supplies" back to 1986, and shows the continual growth in this sector of America's manufacturing industry. Except for two months in 2008, the amount of medical equipment and supplies manufactured in the U.S. was higher in April of this year than ever before. The annual growth in the production of medical equipment manufacturing over the last year was 3.5%, slightly lower than the 4.25% annual average growth over the last 25 years. Consider also that the amount of medical equipment manufactured in the U.S. has doubled since the early 1990s, which is in direct contradiction to the frequent claims about the "demise or death of U.S. manufacturing."

When you think of "U.S. manufacturing in the 21st century" think of high-end, high-value-added heart pumps, MRI machines, and surgical heart values produced by high-wage American medical manufacturing companies like Medtronic. And don't believe the nonsense from Donald Trump and others about how "we don't make anything in the U.S. any more." The U.S. is the world leader in the manufacturing of medical equipment and supplies, and we make more now than ever before.

14 Comments:

From personal experience, I am not surprised by this. The graph shows growth through about 2005 then stagnation. That has been my experience. Good stable job, but everything and everyone is staying put, no place to move on to...

Benjamin: "the US manufacturing industry seems to remain competitive in areas heavily dominated by the federal government--medical, defense and agriculture."

Of course, that the government dominates the defense industry is a constitutional guarantee.

IMO, the medical equipment and agriculture-related industries would be far more efficient if the government did not interfere. I would disagree with the argument that the federal government "dominates" these industries.

The three you listed are not the only industries in which U.S. manufacturing flourishes. Our nation is still the world leader in manufacture of both gasoline and chemicals. Our commercial and private aviation aircraft industry remains very strong. More automobiles are produced in the U.S. than anywhere else. Our food and beverage industry still accounts for over $200 billion of GDP. I could list others.

I think it is misleading to describe an entire industry in a nation as "competitive" or "non-competitive".

Consider the semiconductor industry. Although many semiconductor plants have opened around the globe, that doesn't mean the U.S. is not an attractive location for some semiconductor manufacturers. Here's some evidence:

Hemlock Semiconductor, a subsidiary of Dow Corning,has almost completed a $1.2 billion plant in Clarksville, TN. Even before completion, it is being considered for an even larger $3 billion expansion.

Samsung Electronics completed a $3.5 billion semiconduictor plant in Austin in 2007. The company has since announced plans to double the plant's capacity. Also, Samsung opened a chip design research center nearby in 2010.

Earlier this year, Intel announced it will invest $5 billion in a new semiconductor plant in Chandler, AZ. That's in addition to the $6 billion expansion of its Arizona manufacturing which Intel announced in 2010.

The U.S. continues to attract investment in semiconductor research and manufacture.

I think food processing and agriculture are two different industries. The former is a manufacturing industry. The latter is not.

I do not understand your statement that agriculture is "is virtually a federal reservation". It doesn't square with my knowledge of the industry. I have relatives and friends who produce agriculture products - some raise livestock and some grow crops. They are regulated by various federal and local laws, but they are not controlled in the sense that you imply. Governments do not tell them what to grow, how much to grow, and what prices they'll receive.

A full review of federal intrusion into the ag sector would take an encyclopedia. Suffice it to say, the sector is heavily subsidized and regulated, and the regulated have captured the regulators, and relevant Congressional committees and agencies. The usual story.

If the USDA is so unimportant, why do rural congressman fight to be on the Ag committees?

You are probably correct about agriculture. Although it is not as controlled as in true socialist nations, the bond between government and farmers/agribusiness is too strong for me to defend in any way.

Please note, though, that my list of strong, free-market industries included not agriculture but rather food and beverage manufacturing. Food and beverage manufacturing is not an agriculture industry. It is an American industry which thrives in spite of the government interference with its raw material market.